Nonprofits stay above minimum

MAKING THE MOST: Child and Family Services substitute child care worker Sarah Murphy of North Kingstown works with children. The junior at Rhode Island College is seeing an increase in her minimum-raise pay. / PBN PHOTO/KATE WHITNEY LUCEY
MAKING THE MOST: Child and Family Services substitute child care worker Sarah Murphy of North Kingstown works with children. The junior at Rhode Island College is seeing an increase in her minimum-raise pay. / PBN PHOTO/KATE WHITNEY LUCEY

Sarah Murphy, a substitute child care worker at the nonprofit Child & Family and a junior at Rhode Island College, is getting an increase in her minimum wage salary this year.
Murphy lives with her parents in North Kingstown so she’s not self-supporting yet, but she said the increase from $8 to $9 an hour for working 20 to 30 hours a week is “a good raise. I’ve been given a lot of opportunities here, and I am grateful for all of that,” she said, “so the pay increase will be nice.”
The minimum wage increase to $9 in Rhode Island that took effect Jan. 1 appears, however, to have had a minimal immediate impact on the nonprofit sector, based on interviews with 11 organizations contacted by Providence Business News.
That’s because many local nonprofits already offer hourly rates above the minimum wage. But some nonprofit leaders acknowledge future compensation across all staffing levels will have to be addressed if the minimum wage continues to rise.
By the time Murphy graduates in spring 2016 with a bachelor’s degree in early childhood education, she could be eligible for a rate of $14.01 or more, said Patricia Holliday, the nonprofit’s vice president of human resources.
But even $15 an hour, considered a “living wage” in Rhode Island, can be a challenge to live on independently, said Child & Family President and CEO Marty Sinnott.
A residential counselor for a group home with a bachelor’s degree, required for state licensing, starts at $12 an hour in Rhode Island, Sinnott said. So even if the minimum wage rises higher in Rhode Island and across the country in coming years, the question of how to compensate workers fairly remains one that must constantly be revisited, Sinnott said.
“That’s just too low,” he said of the $12 figure. “This notion of how do we get a system and structure that supports people at a living wage and not a minimum wage is critical and the right thing to do. Minimum wage should not be a destination and a salary level that one goes to college to get.” According to Lyn Freunflich, director of administration and human resources for Third Sector New England and co-author of the 2014 report, “Valuing Our Nonprofit Workforce,” 43 percent of the New England workforce was paid $28,000 or less – at most, about $13.50 an hour – in 2014, an improvement compared with 51 percent in 2010.
The study covered about 250 nonprofits, predominantly in Massachusetts, with about 16 percent of participants coming from Rhode Island, she said.
While her study did not address the minimum wage, Freunflich noted that increasing the minimum wage to $9 an hour in Rhode Island “is still going to keep people well below that $28,000 a year.
“To meet the admittedly outdated wisdom that dictates that housing costs should be about 25 percent of an individual’s wages, a single person sharing a two-bedroom apartment with a roommate in Boston would need to earn $45,600 to meet his or her basic needs,” she said.
Though not negatively affected by the recent minimum wage hike, Middletown-based Child & Family and another nonprofit, Providence-based Children’s Friend, are taking steps to examine the long-term implications of rising minimum wages not only on compensation across the board but on benefits.
Child & Family in March undertook a compensation analysis of 255 employees. All positions earned more than the minimum wage except one full-time kitchen worker and 10 child care substitute positions, Holliday found.
Nonetheless, based on Holliday’s recommendations, Sinnott decided to adjust all staffing compensation. Many workers are paid just over the minimum, Holliday noted. The nonprofit invested $300,000 in additional compensation for the coming year, and nearly $100,000 more in adjustments to benefits, Holliday and Sinnott said.
Some people got a market wage increase, others got more than a 2 percent increase, and any money that remained was spread across the board, Holliday said. A relief worker making $9.48 an hour was brought up to $10.82 an hour, for instance, she said. Sinnott said possible short- and long-term minimum wage increases were on his mind when he asked for the analysis.
“There’s also a real-dollar amount impact in turnover and recruiting and training and the instability of our workforce,” said Sinnott. “It’s in our interests to have a much more stable workforce that’s better compensated, trained and retained. Any human service organization builds relationships between staff and families, and there’s no more important investment that we can make than in compensation and benefits for staff.”
Children’s Friend board members have begun preliminary discussions on the impact of rising minimum wages, says President and CEO David Caprio.
“With the conversation nationally, there’s talk of the minimum wage going as high as $15 [an hour],” he said.
Caprio said all of his 401 full- and part-time workers earn more than $9 an hour. The agency does a competitive market analysis of compensation and benefits every year, he said.
“More than 90 percent of employees qualify for benefits, and we have a fairly rich benefits package,” Caprio said. “That can add 30 percent to 50 percent of value to the wage.
“We subsidize a large portion of our employees’ health insurance costs and that’s all done tax free,” he said. “So tax-free benefits should be looked at as part of the equation. When you’re talking living wage it should be the minimum compensation package, not just wages [that is discussed].
“A minimum wage that started at $10 would start impacting us,” he said.
At Crossroads Rhode Island, which addresses homelessness, the lowest paid of 125 full-time and six part-time workers earns $11 an hour, said Chief Operating Officer Michelle Wilcox. The nonprofit regularly reviews compensation and benefits, and would support further minimum wage increases, she said. “We have a commitment organizationally to pay our employees at or above the median for the position,” Wilcox said. “Whatever the market is for whatever type of work it is, we want to make sure we’re at the 60th percentile. Homelessness is in fact a result of economic poverty, so we want to make sure we’re not creating a situation we’re trying to address, a situation it is our mission to serve and solve.”
Of the larger nonprofits, Lifespan declined comment, but Care New England spokesperson May Kernan said the minimum wage increase “won’t have a significant impact on Care New England, given the market-based compensation strategy we already have in place.” She declined to elaborate.
A medium-sized nonprofit, the Providence Center (which recently announced an affiliation with Care New England), has fewer than one dozen employees earning the minimum and a total of 529 full-time workers and 66 part-timers and 105 per-diem and fee-for-service workers, said Garry Bliss, director of government and external relations. The nonprofit’s human resources director was unavailable for further comment, Bliss said.
Of the smaller nonprofits, the Newport Historical Society did not see any impact on wages from the increase to the minimum, said Executive Director Ruth S. Taylor. The historical society has about a dozen employees.
“We’ll be thinking hard when we start someone, to start them at $10, above the minimum,” said Taylor. “If folks come in qualified, we start them at $10; if they come with no experience, we start them at $9. You just worry [about] people feeling good about what they’re getting paid more than anything else.”
She also added that she hopes the wage hike puts more money in the pockets of consumers and the general public.
“We are a small business but we’re very supportive of the raise,” she said. •

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